GBP/USD stays in a tight range above 1.24
Following a slip to a fresh daily low at 1.2418, the GBP/USD pair has been staying in a narrow 20 pip range during the NA session, looking for the next catalyst. At the moment, the pair is down 0.42% at 1.2435.
After Monday's weak manufacturing PMI data, today's data showed that the construction activity in the United Kingdom also slowed down in March, putting further pressure on the GBP. On the contrary, the trade deficit figures from the United States came in below expectations as the exports rose more than the imports did.
- UK construction PMI eases in March, misses estimates
On a side note, the IBD/TIPP revealed that Economic Optimism Index declined to 51.7 vs. 55.3 in March 2017. The official report suggested that despite a recent weakness in the confidence, Americans are optimistic that the Trump administration will deliver on the promises to cut taxes and thinning down regulations.
The investors are now focused on the latest market chatter that speculates a new health-care bill being revealed later today. A possible reaction by the stock indices could bring volatility back to the markets as investors risk sentiment could shift.
Technical outlook
A sustained rise above 1.2450 (Fib. 61.8% of Dec/Jan fall) could allow the GBP/USD pair to extend the momentum towards 1.25 (psychological level) and 1.2560 (Mar. 31 high). On the downside, the first support could be seen at 1.2405/10 (50-DMA/100-DMA) followed by 1.2340 (Mar. 21 low) and 1.2270 (Fib. 38.2% of Dec/Jan fall).
- GBP/USD neutral/bearish near term – Scotiabank
